| name | business-model-canvas |
| description | Design and analyze business models using the Business Model Canvas framework. Use when evaluating startups, planning new products, pivoting existing businesses, or understanding how companies create and capture value. |
Business Model Canvas - Strategic Business Design
Visual framework for developing, documenting, and iterating on business models.
Created by Alexander Osterwalder, used worldwide by startups and enterprises.
When to Use This Skill
- Evaluating new product or startup ideas
- Analyzing competitor business models
- Planning business pivots or expansions
- Communicating strategy to stakeholders
- Identifying gaps in current business model
- Due diligence on investments or partnerships
The Nine Building Blocks
┌─────────────────┬─────────────────┬─────────────────┬─────────────────┬─────────────────┐
│ │ │ │ │ │
│ KEY PARTNERS │ KEY ACTIVITIES │ │ CUSTOMER │ │
│ │ │ VALUE │ RELATIONSHIPS │ CUSTOMER │
│ Who helps us? │ What do we do? │ PROPOSITIONS │ │ SEGMENTS │
│ │ │ │ How do we │ │
│ ├─────────────────┤ What value │ interact? │ Who do we │
│ │ │ do we deliver? │ │ serve? │
│ │ KEY RESOURCES │ ├─────────────────┤ │
│ │ │ │ │ │
│ │ What do we need?│ │ CHANNELS │ │
│ │ │ │ │ │
│ │ │ │ How do we │ │
│ │ │ │ reach them? │ │
│ │ │ │ │ │
├─────────────────┴─────────────────┴─────────────────┴─────────────────┴─────────────────┤
│ │ │
│ COST STRUCTURE │ REVENUE STREAMS │
│ │ │
│ What does it cost? │ How do we earn? │
│ │ │
└───────────────────────────────────────────┴─────────────────────────────────────────────┘
Building Block Details
1. Customer Segments
Who are you creating value for?
| Segment Type | Description | Example |
|---|
| Mass Market | No distinction between customers | Consumer electronics |
| Niche Market | Specialized, specific segments | Luxury goods |
| Segmented | Slightly different needs/problems | Bank retail vs. wealth |
| Diversified | Unrelated segments | Amazon: retail + AWS |
| Multi-sided | Interdependent segments | Credit cards: merchants + users |
Questions to answer:
- Who are our most important customers?
- What jobs are they trying to get done?
- What pains and gains do they have?
2. Value Propositions
What value do you deliver to the customer?
| Value Type | Description |
|---|
| Newness | Satisfying previously unmet needs |
| Performance | Improving existing product/service |
| Customization | Tailoring to specific needs |
| Getting it done | Helping customers complete a job |
| Design | Superior aesthetics or experience |
| Brand/Status | Value from using a specific brand |
| Price | Similar value at lower price |
| Cost Reduction | Helping customers reduce costs |
| Risk Reduction | Reducing risks customers face |
| Accessibility | Available to those who lacked access |
| Convenience | Making things easier to use |
3. Channels
How do you reach and communicate with customers?
Channel Phases:
Awareness → Evaluation → Purchase → Delivery → After-sales
│ │ │ │ │
▼ ▼ ▼ ▼ ▼
Ads Website Store Shipping Support
PR Reviews App Install Training
Social Demos Sales Access Updates
| Channel Type | Examples |
|---|
| Direct | Sales force, website, owned stores |
| Indirect | Partner stores, wholesalers |
| Owned | Physical stores, website, app |
| Partner | Distributors, affiliates, marketplaces |
4. Customer Relationships
What type of relationship does each segment expect?
| Relationship Type | Description |
|---|
| Personal assistance | Human interaction during/after |
| Dedicated | Specific rep for individual customer |
| Self-service | No direct relationship |
| Automated | Simulated personal via automation |
| Communities | User communities and forums |
| Co-creation | Customers help create value |
5. Revenue Streams
How does each customer segment generate revenue?
| Revenue Type | Description | Pricing |
|---|
| Asset sale | Selling ownership rights | Fixed/Dynamic |
| Usage fee | Pay per use | Per-unit |
| Subscription | Continuous access | Recurring |
| Lending/Renting | Temporary access | Time-based |
| Licensing | Permission to use IP | Per-license |
| Brokerage | Intermediation fees | Transaction % |
| Advertising | Fees for advertising | CPM/CPC/CPA |
6. Key Resources
What assets are essential to deliver the value proposition?
| Resource Type | Examples |
|---|
| Physical | Facilities, machines, vehicles, POS |
| Intellectual | Brands, patents, data, proprietary tech |
| Human | Expert staff, sales teams, engineers |
| Financial | Cash, credit lines, stock options |
7. Key Activities
What must you do to deliver the value proposition?
| Activity Type | Examples |
|---|
| Production | Manufacturing, designing, delivering |
| Problem Solving | Consulting, training, custom dev |
| Platform/Network | Maintaining platform, matching supply/demand |
8. Key Partners
Who are your key partners and suppliers?
| Partnership Type | Motivation |
|---|
| Strategic alliance | Non-competitors working together |
| Coopetition | Competitors partnering |
| Joint ventures | New business development |
| Buyer-supplier | Reliable supplies |
Partnership motivations:
- Optimization and economy of scale
- Reduction of risk and uncertainty
- Acquisition of resources and activities
9. Cost Structure
What are the most important costs?
| Cost Type | Description |
|---|
| Fixed costs | Salaries, rent, utilities |
| Variable costs | Materials, commissions, hosting |
| Economies of scale | Cost advantages from volume |
| Economies of scope | Cost advantages from variety |
| Model Type | Focus |
|---|
| Cost-driven | Minimize costs wherever possible |
| Value-driven | Focus on value creation |
Analysis Framework
Step 1: Define Customer Segments First
Start with who you serve:
Primary Segment:
├── Demographics: [Age, location, income]
├── Psychographics: [Values, interests, lifestyle]
├── Behaviors: [Usage patterns, buying habits]
└── Needs: [Jobs to be done, pains, gains]
Secondary Segments:
├── [Segment 2]
└── [Segment 3]
Step 2: Articulate Value Proposition
For each segment, define the value:
Value Proposition Canvas:
Customer Jobs Product/Service
├── Functional ├── Features
├── Social ├── Benefits
└── Emotional └── Experience
↓ ↓
Customer Pains → Pain Relievers
↓ ↓
Customer Gains → Gain Creators
Step 3: Map Channels and Relationships
How you reach and interact with customers:
Customer Journey:
Discover → Research → Buy → Use → Advocate
│ │ │ │ │
▼ ▼ ▼ ▼ ▼
Channel: SEO/Ads Website App Email Referral
Relation: Automated Self Self Auto Community
Step 4: Define Infrastructure
What you need to deliver:
Value Delivery Infrastructure:
Key Partners Key Activities Key Resources
├── Suppliers ├── Core operations ├── Physical
├── Distributors ├── Support ├── Intellectual
└── Allies └── Platform ├── Human
└── Financial
Step 5: Model Economics
Understand the financial viability:
Revenue Streams Cost Structure
├── [Stream 1]: $X/unit ├── Fixed: $Y/month
├── [Stream 2]: $X/month ├── Variable: $Z/unit
└── [Stream 3]: X% of GMV └── CAC: $W/customer
Unit Economics:
├── LTV: $[amount]
├── CAC: $[amount]
├── LTV:CAC ratio: [X]:1
└── Payback period: [months]
Output Template
After completing analysis, document as:
## Business Model Canvas
**Company/Product:** [Name]
**Date:** [Date]
### Canvas Overview
| Block | Summary |
| ---------------------- | ------------------------ |
| Customer Segments | [Key segments] |
| Value Propositions | [Core value delivered] |
| Channels | [Primary channels] |
| Customer Relationships | [Relationship types] |
| Revenue Streams | [How you make money] |
| Key Resources | [Critical assets] |
| Key Activities | [Core operations] |
| Key Partners | [Strategic partnerships] |
| Cost Structure | [Major cost drivers] |
### Detailed Analysis
#### Customer Segments
[Detailed breakdown of segments, their needs, and characteristics]
#### Value Propositions
[Specific value delivered to each segment, pain relievers, gain creators]
#### Channels
[Channel strategy across customer journey phases]
#### Customer Relationships
[Relationship types per segment and their cost/value]
#### Revenue Streams
[Revenue model details, pricing strategy, unit economics]
#### Key Resources
[Critical resources and their strategic importance]
#### Key Activities
[Core activities that drive value creation]
#### Key Partners
[Partnership strategy and key relationships]
#### Cost Structure
[Cost drivers, fixed vs variable, economies of scale/scope]
### Strategic Assessment
**Strengths:**
- [Strength 1]
- [Strength 2]
**Weaknesses:**
- [Weakness 1]
- [Weakness 2]
**Opportunities:**
- [Opportunity 1]
- [Opportunity 2]
**Risks:**
- [Risk 1]
- [Risk 2]
### Recommendations
| Priority | Action | Expected Impact |
| -------- | -------- | --------------- |
| High | [Action] | [Impact] |
| Medium | [Action] | [Impact] |
Real-World Examples
Netflix
| Block | Details |
|---|
| Segments | Streaming viewers, content enthusiasts |
| Value Prop | Unlimited on-demand content, originals, no ads |
| Channels | App, smart TVs, website, partnerships |
| Relationships | Automated personalization, self-service |
| Revenue | Monthly subscription tiers |
| Resources | Content library, recommendation AI, brand |
| Activities | Content production, platform development |
| Partners | Studios, device manufacturers, ISPs |
| Costs | Content acquisition, tech infrastructure, marketing |
Airbnb
| Block | Details |
|---|
| Segments | Travelers (guests), property owners (hosts) |
| Value Prop | Unique stays, extra income, trust platform |
| Channels | Website, app, social, SEO |
| Relationships | Community, reviews, support |
| Revenue | Service fees (guest + host) |
| Resources | Platform, brand, user data, trust system |
| Activities | Matching, trust & safety, community |
| Partners | Payment processors, insurance, photographers |
| Costs | Platform development, trust & safety, marketing |
Best Practices
Do
- Start with customer - Everything flows from customer segments
- Test assumptions - Each block contains hypotheses to validate
- Iterate frequently - Update as you learn from the market
- Check coherence - All blocks should connect logically
- Quantify where possible - Add numbers to revenue and costs
Avoid
- Inside-out thinking - Don't start with product features
- Static canvas - It's a living document, not a one-time exercise
- Ignoring competition - Understand competitor business models
- Skipping validation - Assumptions need testing with real customers
- Over-complicating - Keep it high-level and actionable
Integration with Other Methods
| Method | Combined Use |
|---|
| Jobs-to-be-Done | Deep dive into value proposition |
| Five Whys | Root cause analysis of model weaknesses |
| Lean Startup | Build-measure-learn cycles for validation |
| Value Proposition | Detailed value-customer fit analysis |
| Graph Thinking | Map relationships between canvas elements |
Resources
